11
Apr
Rate decision 'will boost confidence'
Confidence among consumers may well be aided after the Bank of
England's monetary policy committee (MPC) decided to drop the base
rate of interest to five per cent, it has been claimed.
Chief economist at Abbey Barry Naisbitt stated that a slowdown in
the economy undoubtedly had a say in whether rates would be altered
at this stage.
According to Mr Naisbitt, the development marks a "forward-looking
view" from the bank and that a rate cut was possible because the
focus is upon medium-term concerns.
He commented: "The MPC has taken a forward-looking view that slower
growth is likely to reduce medium-term inflationary pressures and
has been able to cut rates because of its focus on medium-term
inflation."
The official added that the body is due to watch both growth and
inflation keenly in the months ahead.
A rate trimming by itself is not good enough to boost the market,
as more liquidity is needed, the Council of Mortgage Lenders said
in response to the cut.